Cloud growth slows, AI-driven CapEx up 42% year-on-year - Alphabet's Sundar Pichai has a double blow for Wall Street (and it didn't go down well)
diginomica.comWall Street didn’t like what it heard from Alphabet CEO Sundar PIchai yesterday. Bad enough having to swallow more of the ‘we need to keep upping our AI investment spend' tough love - driving planned 2025 Capital Expenditure (CapEx) up 42% from $52.5 billion last year to $75 billion this - but to do that at the same time as announcing that cloud growth has slowed down was a toxic combination for the short-termists.
Google's cloud business did in fact turn in a 30% year-on-year increase in revenue to $11.96 billion in the fourth quarter, but crucially that was a sequential slowing down from the 35% increase in Q3. Meanwhile Pichai was unrepentant about the hefty CapEx increase, telling the post-result announcement analyst call:
Part of the reason we are so excited about the AI opportunity is we know we can drive extraordinary use cases because the cost ...
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